Scope#36 | XL Parts - Going the Extra Mile

Marubeni Continues to Drive Growth in its U.S. Automotive Aftermarket Business by Investing in People and New Technologies.

“XL Parts, this is Delvin Miller. How can I help you?” Picking up the phone right away, Miller responds in a friendly manner, but he wastes no time. He quickly enters the year, make, model of the customer’s car into the computer to identify the solution, and then looks at the inventory; his eyes stay focused on his screen while he talks. Miller knows that the caller, a mechanic in the area, wants to get the necessary parts as quickly as possible for his customer, who has just brought in a vehicle for repairs. The caller knows that through XL Parts, he can get the right parts within 45 minutes.

Miller is an Inside Sales Representative at XL Parts, a wholesale auto parts distributor headquartered in Houston, Texas. As of March 2020, the company has 106 satellite stores operating in three Southern states: Texas, Oklahoma, and Louisiana. Miller works at Store 10, which is situated in Alief, a demographically diverse suburb in Southwest Houston. Store 10 is a “Hub,” which is made up of a call center, a store counter for walk-in customers, and a warehouse. In addition to having Automotive Service Excellence (ASE) certification, almost all of his colleagues are also bilingual, or even trilingual: English, Spanish and Vietnamese.

As its name suggests, XL Parts boasts a superior inventory that houses more than 150,000 automotive parts for passenger vehicles and light trucks, which they procure from more than 170 vendors. This vast assortment allows the company’s customers, the people who perform vehicle maintenance and repairs including car dealerships, to choose from a wide range of options according to the needs of their customers, the car owners. While some people are more focused on quality or brands, others are more price-conscious. But, more often than not, people say that they want the best blend of both.

“In the United States, cars are important in terms of how people get around. When their car is not working, their life stops,” says Mike Odell, President and CEO of XL Parts. “Our customers are stuck in the middle trying to diagnose, repair, maintain the vehicles for their customers, and they are dealing with the drama that their customers are experiencing in their lives.” With a huge assortment of parts as well as a rapid, reliable delivery system that averages 30 minutes after the order has been placed, Odell says, “Our customers can get their customers back on the road and get their lives started again.”

Leveraging Technologies for Customer Relations

XL Parts, which began its business in 1984, was first invested in by MAIHO III, LLC, also known as Marubeni Automotive Aftermarket Holdings, in December of 2015 (at which time its investment rate was 80%), and has been wholly owned by the company since July of 2018. In 2017, MAIHO III also made a significant investment in TPH Holdings, LLC (a.k.a. The Parts House). TPH runs the same business as XL Parts, but in Florida, Georgia, Alabama, and Puerto Rico where it operates a total of 76 stores. The two companies combined receive an average of 32,000 orders every day.

In the United States, there were about 278 million registered light vehicles (passenger cars and light trucks) in 2019, and the average annual miles travelled by those cars for the same year was over 11,000 (17,600 km), according to data compiled by the Auto Care Association. “With mileage like this, people need to maintain their vehicles properly,” says Takashi Kiso, chairman of both MAIHO III and XL Parts. He, too, drives his own car an average of about 1,000 miles (1,600 km) per month.

According to the U.S. Department of Transportation, the average age of light vehicles was 11.8 years in 2019, a figure which has continued to increase since 1995, when it was 8.4. “New car dealers tend to service only for a warranty period, which is three to five years,” Kiso says, emphasizing the growing demand for maintenance and repairs in response to the aging of cars. “We are aiming to expand our business further, especially in Southern areas.”

At XL Parts, orders can be placed online, but nearly 70% are still placed over the phone. “We leverage the technology to allow us to make the connection between the caller and the agent,” says Iyad Kayyali, Chief Technology Officer. XL Parts employs more than 100 Inside Sales Representatives across nine call centers. When customers call, they are automatically identified and routed to an agent who they have dealt with in the past and knows them best. “It’s all about relationships,” Kayyali says.

When the sale is finalized, an agent can place an order from any location following a sourcing route. Of course, the closer the customer is to where the part is located, the faster the delivery can be completed. Parts that are most in demand, such as brake pads, motor oil, or air filters, are always in stock at satellite stores; they get replenished on a daily basis. According to XL Parts, 87% of the parts that are ordered can be shipped directly from satellite stores, whereas parts that are less common are more likely to be stored in a Hub or a Distribution Center (Houston, Dallas/Fort Worth, San Antonio, Oklahoma City and Louisiana) —mega warehouses that are larger than 200,000 square feet (18,580 ㎡). Each day, there are seven to nine scheduled shuttles that travel between the Distribution Center, Hubs, and satellite stores, so even the least common parts can be delivered to the customer within a few hours.

Be the First in Line

“We are very big on data collection,” Kayyali says. XL Parts monitors all the different phases of a transaction, from the sale, to the warehouse picking and packing, and finally the delivery. Such data is used, for example, to consider shifting a customer to another location when the delivery is taking longer than it should be. It is also used to examine the opportunity to open a new store. Every driver has a device in their vehicle that reports back their GPS location, so that when a customer calls inquiring about the delivery, the dispatcher can provide an accurate timeframe of when to expect the part. “It’s all about our operational excellence,” Kayyali says.

In order to be “the first in line,” in the minds of their customers, customer feedback is also collected via a more traditional method: face-to-face communication. This process is spearheaded by Outside Sales Representatives, each of whom are responsible for 2 to 3 XL Parts satellite stores, which in turn are responsible for taking care of 100 to 175 XL Parts customers – mechanics and repair shops in the surrounding area. These Outside Sales Representatives make regular visits to review the company’s performance on product availability, delivery, and call centers, as well as to discover more about each customer’s preferences and behaviors, so that they can develop plans to increase XL Parts’ share of their purchases.

“Our market is very busy, which can lead quickly to the customer being very preoccupied with their own business,” says David Gibson, Vice President of Sales. The size of maintenance and repair shops varies from one technician to up to 12 technicians, and an average-size shop takes 15 to 20 cars a day. “I don’t think [XL Parts] is their priority unless we bring them something very important.” Gibson continues, “It’s really a game of speed and efficiency for our customers.”

Maintenance and repair professionals say that fast delivery of quality parts is not only crucial for them to do their job, but also helps grow their businesses. “Having quality parts, we are able to put them on to our customers’ cars, and they don’t have to come back. By itself, that allows us to grow,” says Moe Rabieh, manager of Elite Auto Experts, a family-run garage and one of XL Parts’ long-time customers. He points out that technicians will more likely have to redo the job a week or month later if they use cheap, low-quality parts. “As long as we are able to get quality parts very quickly, we are able to get the car in and out within the same day or the next day,” Rabieh says. “Our customers will be very happy with that, and they can market for us by word of mouth.”

One-Stop Service for All

The U.S. automotive aftermarket is such a huge industry because there are so many cars on the road, and they all need to be tuned up. “It has a long history, but its traditional business model didn’t change in the past. That is why there are so many players in this market,” says Fumihito Ando, Executive Vice President of both MAIHO III and TPH Holdings. He explains that Marubeni is trying to transform the traditional business model into a new one by innovating with new technologies.

One such example is autonomous vehicles. The use of self-driving technology is expected to be necessary in the future as a countermeasure to predicted driver shortages – a problem which will become more pronounced amid the rapid spread of online shopping and ride hailing. Taking a step towards a solution to this problem, MAIHO III made an investment in udelv, a Northern California startup that develops autonomous delivery vans. While autonomous vehicles going anywhere anytime is a long way off, using them on pre-determined, defined routes isn’t. Working closely with udelv, MAIHO III has completed the mapping of XL Parts’ delivery routes between its own locations in Houston—Distribution Centers, Hubs and satellite stores—and is now conducting Level Two tests (vehicles moving mostly autonomously with a driver ready to take control) on those routes, aiming to move on to the ultimate goal of complete automation in the near future.

Another example is the mobile mechanic. So-called “shade-tree mechanics,” independent service providers who work strictly around their own neighborhood because they don’t have a physical shop, can now be connected through smartphone apps to prospective customers in a wider area. People can save time by, for example, placing an order for an oil change with a mobile mechanic who comes to do the job in a parking lot outside of the customer’s office. MAIHO III has recently made an investment in Wrench, a Seattle startup that provides mobile mechanic services.
“We will provide a better platform in the aftermarket business using new digital technologies, which traditional business partners didn’t have before,” Ando says. “Our ultimate goal is to provide one-stop service to all the end-users. We will provide a solution to any problem that they may have.”

All information contained in this article is based on interviews conducted in January 2020.

国产女人-国产V女人-女人自拍国产-国产女人ed2k-国产女人bt